Germany urges crackdown on tax havens

European governments yesterday moved to crack down on tax fraud and to press tax havens to supply more information to try to stem the loss of an estimated €100bn (£77bn) a year across the EU.

With Germany leading the charge, EU finance ministers ordered the European commission to bring forward a review of three-year-old legislation that narrows the scope for tax evasion.

Peer Steinbrück, the German finance minister, read the riot act to ministers from 27 countries in Brussels and won support for his campaign to get tough with tax cheats. The revelation that hundreds of Germans were stashing their money in Liechtenstein, he said, offered "spectacular cases of tax fraud" that were not merely a scam but "a social and moral issue".

Britain supported the German demands, with Yvette Cooper, chief secretary to the Treasury, one of the few officials at the meeting to single out Liechtenstein for opprobrium. "We need clear pressure on Liechtenstein to provide more information to make sure people are not acting illegally to evade their tax obligations," said a Treasury spokesman.

But Steinbrück extended his criticism to EU countries Austria, Luxembourg and Belgium, whom he criticised for their secrecy and because they were negotiating double taxation agreements with tax havens in the far east that failed to observe the OECD's code on tax transparency.

Under the EU's 2005 savings tax directive, states are obliged to supply fellow members with information on their nationals' interest earnings. Austria, Belgium and Luxembourg, however, were exempted from the obligation.